Virginia passes budget cutting Medicaid, other health services

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Story updated with new reaction from Virginia Hospital & Healthcare Association.

Virginia lawmakers went into overtime this weekend to pass a two-year, $70 billion budget that includes millions in cuts to health and human services programs in the state.

Set to adjourn for the 2010 session March 13, legislators reconvened in Richmond the next day to approve a compromise budget. The measure passed the House of Delegates by a vote of 73-23 and subsequently passed in the Senate, 34-6.

The budget document now goes to Gov. Bob McDonnell, who has 30 days to amend the approved legislation.

Public education and health and human services took the biggest budget cuts, with the latter incurring a reduction of 3% in Medicaid reimbursements for medical care providers this budget year and a 4% cut to the fiscal 2011 budget, which starts July 1. The current reimbursement rate is 72 cents on the dollar.

Katherine Webb, senior vice president of the Virginia Hospital & Healthcare Association, told IFAwebnews.com that the $680 million in health cuts initially proposed by McDonnell remain in the budget and that $360 million in additional reductions were avoided, but only because legislators are applying federal Medicaid matching dollars.

The problem, Webb said, is that while Federal Medicaid Assistance Percentage (FMAP) money has been approved by the U.S. House of Representatives and Congress, it has not received the signature of President Barack Obama, meaning Virginia is counting on unapproved funds to ease health care cuts.

“We are urging our Congressional delegation to approve something before July 1,” Webb said. “Without those FMAP funds, cuts take effect July 1.”

She added that Medicaid reimbursement reductions – to 68 cents on the dollar in budget year 2011 and 64 cents on the dollar in budget year 2012 – will make it “very difficult” for hospitals in the state.

“Those health care cuts do affect the possibility of jobs and frankly, make decision-making internally in hospitals regarding service, difficult,” she said. “At some point, you can’t make the costs work.”

Webb said hospitals will need to make tough choices to either reduce service or even jobs.

Prior to the finalized budget, the VHHA was critical of health care cuts for these very reasons.

“The General Assembly, like all Virginians, has had to make tough decisions during these difficult economic times,” said says Laurens Sartoris, president of the VHHA, in a statement. “But it is unconscionable to take money designated for a specific purpose and allocate it to other areas of the budget. No one would find it reasonable to transfer federal dollars for education to Medicaid. Why would it be acceptable to take health care dollars away from health care?”

Other health aspects of the pending budget include mental health services for 250 additional Virginians through Medicaid and $1 million for the Massey Cancer Center at VCU Medical Center in 2011.

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